Competitive instincts harnessed to drive new careers

Competitive instincts harnessed to drive new careers | IRStone - stock.adobe.com

While many athletes will dream of making it big, some will never achieve their ultimate goals, and others may find themselves hit with injury which could bring an early end to their careers.

In the middle of training and competing, long-term financial planning might be the last thing that sports people consider. But experts stress that saving for the future is vital. Some also say  the resilience sports people develop could prove useful if they choose a career in finance in the years to come.

Among them is Gameplan Wealth, which was established alongside its sister company, Gameplan Financial Planning. Gary Thorpe, director of the former, says the firm aims to be the premier opportunity for athletes transitioning from professional sports to their next life chapter.

He explains: “We not only offer careers to athletes, but also leverage the mental strength and unique personalities they bring to provide exceptional service to our clients.

“Our founders, whose sporting backgrounds are in rugby and ice hockey, understand the challenges athletes face when retiring from a sport they’ve dedicated their lives to. When the crowds disperse and injuries heal, many athletes find themselves without a steady income and facing uncertainty. To address this, we developed the Athlete to Adviser academy. This programme allows athletes to gain necessary qualifications, earn additional revenue, and build confidence while still competing, ensuring a seamless transition to a full-time career when they retire.

“During this journey, athletes need specialised, trusted advice to prepare for their future. This includes securing the right mortgage contracts that align with their unique remuneration and contract types, as well as finding appropriate investment vehicles to safeguard their funds and plan for their financial future.”

Thorpe says the firm recognises that athletes don’t fit the “norm” and require a specialised approach from advisers who understand their journey. According to Thorpe, Gameplan Wealth’s advisers, who have walked the same path, quickly build trust and establish long-term relationships.

He adds that athletes prefer dealing with “one of their own” for financial matters and potential future careers, maintaining the team mentality they’ve developed. He says: “All our advisers undergo a rigorous training programme, making them specialists in their field and capable of providing unrivalled financial advice. We excel in creating bespoke financial plans for our clients and athletes, helping them focus on living the life they desire. Once a plan is in place, we research the entire market to deliver investment, protection, and mortgage solutions best suited to each client’s unique circumstances.”

For athlete clients, who are often focused on performance in the present, the firm emphasises the importance of planning for retirement to protect families, lifestyles, and financial stability. Delaying this planning can lead to uncertainty and financial stress.

“We ensure athletes have the right protection contracts in place for unforeseen circumstances by designing bespoke protection plans tailored to their specific needs,” concludes Thorpe.

Waverton Wealth says it advises clients from all walks of life, including those in the world of sports. Sean Lowson, Waverton Wealth financial planner, explains: “Those earning a living from playing sports have a few particular challenges that most individuals don’t face. As a result, taking proper advice and having a well-thought-out financial plan is crucial.

“Big earnings often arrive early in a sports person’s career. For a lot of sports people, their peak earnings in their lives will arrive in their late 20s/early 30s. This is in contrast to most individuals whose earnings slowly increase over a 30-to-40-year working life as their knowledge and experiences build over time.”

Lowson adds that while big contracts and prize winnings often make the headlines, for many in the world of sports, uncertainty over future income is a constant. Contracts can be short and very contingent on personal appearances or overall team success. And, at any point in a contract, an injury can occur limiting earnings significantly. In serious cases, injury can completely stop earnings.

“Planning for the future is critical for sports people. Increasingly, we are seeing sports people going back to university or other forms of further education whilst still playing with an eye on the future,” says Lowson. “Future employment opportunities within sport exist but are difficult and can be limited – there only needs to be one head coach for every 25 players! Whilst sports teams have become increasingly more commercial operations over the past 20 years or so – and thus giving some opportunity for former players to move into a role within a club – most players will need to seek future employment opportunities away from sport.”

He agrees that, in some businesses, having a former sports player can be a great asset to the staff if they are well-known and have a broad network. However, Lowson says a lot of former sports people are entering the job market with no relevant experience and find themselves starting a new career in their early to mid-30s. He points out that this is often at the same time as other financial commitments, such as childcare and a mortgage.

He adds: “Sports teams will typically have insurance for players – players are both staff members and financial assets, ultimately – should they get injured, which would provide some form of income protection. Although, if an injury results in a contract not being renewed then this protection could also end.

“Any form of personal policy is likely to be relatively expensive, given the risk of injury, and therefore the potential payout for any insurance company to cover  can be a very useful way to reduce the impact of any period where earnings are limited or halted by injuries.”

When it comes to financial planning for sports clients with short careers, several key things should be considered, according to Tom Munro of McHardy Private Wealth. Firstly, he describes budgeting and cash flow management as the cornerstone of a sound financial plan, as it is vitally important to create a budget and manage their money effectively to ensure they can sustain their lifestyle beyond their playing career.

“Career transition planning is also paramount, planning for life after sports is crucial for athletes with short careers. This may involve exploring education and training opportunities, as well as potential career paths post-retirement,” says Munro.

“Investment and savings strategies are next, investing a reasonable portion of their earnings in diversified portfolios to build wealth and secure their financial future.

“Another key area is insurance coverage, including health, disability, and life insurance, as this will protect sports clients and their families from unforeseen circumstances.”

Other longer-term strategies would include tax planning, working closely with each individual to optimise tax strategies which can significantly help sports clients minimise their liabilities while maximising their savings, he says.

Munro recommends estate planning – establishing a comprehensive plan, including such items as wills, trusts and Power of Attorney. He describes “belt and braces” implementation as essential for the individual to protect their assets and ensure their future wishes are carried out.

Pointing to the international dimension, Sean Cockburn, director at Forvis Mazars in the UK, says: “Athletes operating in multiple jurisdictions will want to take specialist advice to ensure they are reporting their income correctly.

“The host country may seek to tax a portion of global endorsement or sponsorship income in addition to income received from an event. Tax legislation can vary wildly between countries and the UK is almost unique in having a 5 April fiscal year-end – all of which can make it difficult to establish the amount of income that is subject to UK taxation.

“Where an athlete is resident elsewhere, their ‘home’ country is likely to tax them on their worldwide income. To prevent double taxation, the UK has a network of double tax treaties with other countries which determine how different types of income are taxed – and, where the same income is taxed twice, these agreements normally allow the tax due in one country to be offset against the tax charged in the other.

“However, this relief is limited to the tax correctly payable under the terms of the treaty so – even where tax is withheld on prize money or other income – it is important to ensure tax filings are completed in both jurisdictions and the preparation is co-ordinated so relief can be claimed where possible.”